9911796707
TMI Blog1983 (8) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be taken of all the assets and liabilities of the firm and the net profit or loss be determined which shall be divided or borne by the parties as mentioned in clause No. 4 supra. The accounts for the first time will be closed to profit and loss on 31-3-1979. " Though the accounting year for the other years could end on a date at the convenience of the partners, it was pointed out that the firm's books had to be closed for the first time on 31-3-1979. The assessee had closed its accounts only on 1-4-1979. It was stated by the assessee that the closing day was deferred by one day as 31st March was not an auspicious day. The ITO considered this to be a violation of the terms of the partnership deed with the result that he declined to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or specifications in the deed. He claimed that the orders of the authorities below could be supported even on this ground apart from the reasons stated by them. 3. We have carefully considered the records as well as the arguments. The accounting year, as stated by the ITO, is the same as given by the assessee. It is, therefore, not possible to entertain any objection as regards accounting year at this stage as sought to be canvassed by the learned departmental representative. No doubt, the assessee ought to have closed the accounts as on 31-3-1979 as per partnership deed. If the partners had agreed to extend the last date by one day by common consent among them, we fail to see how it could be said that there has been violation of the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on account of such deviation would amount to a pedantic and hyper-technical view of law if we were to support the orders of the authorities below. It must be pointed out that there has been a division of profits arising in the accounting year if the assessee's accounting year is taken to be the correct accounting year. Division of profits including a day's profit of the next accounting year on the basis of argument of the learned departmental representative would only mean that there is an advance division of part of the profits for a day falling in the next accounting year. Since the profit-sharing ratio of both years was the same, it cannot mean that there is no division of profits of the year. Actually, it cannot be said that next year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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